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Centre urges J&K to implement GST from July 1

The Centre has urged Jammu and Kashmir to implement the goods and services tax from July 1 to ensure that consumers and industry in the State are not put at a disadvantage.

In a letter to Jammu and Kashmir Chief Minister Mehbooba Mufti, Union Finance Minister Arun Jaitley has said that non-implementation of the new levy from July 1 will have an “adverse impact” and lead to a general increase in the prices of goods that are purchased from other States as well as in the prices of all goods being sold from Jammu and Kashmir.

“GST is a destination-based tax… if the State of Jammu and Kashmir does not join GST on July 1, dealers shall not be able to take credit of the Integrated GST for all purchases. This shall get embedded into the prices of purchased goods or services, leading to cascading of tax and increase in prices of the said goods or services for the final consumers in Jammu and Kashmir,” Jaitley said, according to a release by the Finance Ministry on Monday.

All States and Union Territories, barring Jammu and Kashmir, have passed the State GST Act or promulgated an Ordinance to ensure that the new indirect tax levy comes into effect from July 1.

With special status under Article 370, J&K has to amend its own Constitution to roll out GST. A special session of the State Assembly called on June 17 failed to pass the Bill.

With concerns on how GST will impact the State’s fiscal autonomy, the State Government has now set up an all-party committee to look into the new levy. It is expected to meet this week but it is unlikely that the State will implement GST from next month.

Noting that J&K has played a meaningful role in the deliberations of the GST Council and even hosted the 14th round of discussions, the Union Finance Minister has noted that under Article 370 of the Indian Constitution, amendments made in the Constitution of India are applicable to Jammu and Kashmir with the concurrence of the State Government, as the President may by order specify.

Accordingly, he has urged Mufti to send the concurrence of the State, with any modifications considered necessary for its special status, on the Constitution (One Hundred and First Amendment) Act, 2016 for the order of the President.

The Hindu, New Delhi, 17th July 2017

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